Central Bank Policies

Definition ∞ Central bank policies are actions taken by a nation’s central monetary authority to manage the economy, primarily through controlling interest rates, money supply, and credit conditions. These policies aim to maintain price stability, promote economic growth, and ensure financial system stability. Tools include adjusting benchmark interest rates, conducting open market operations, and implementing quantitative easing or tightening measures. Their decisions significantly influence the broader financial landscape.
Context ∞ Central bank policies are a major driver of global financial markets, and their impact on digital assets is frequently reported in crypto news. For example, announcements regarding interest rate adjustments or inflation targets can influence investor sentiment towards risk assets, including cryptocurrencies. Changes in monetary policy can shift capital flows, affecting the liquidity and valuation of digital currencies as participants seek returns or safety.